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MCQ 4 (b, c, b)

clipped from www.bized.co.uk

Money: Money markets




Q1. Other things constant, if the anticipated rate of inflation rises, we would expect the nominal interest rate to


(Select one answer)





(a) * remain unchanged

(b) * rise by the same amount as the increase in the anticipated rate of inflation

(c) * fall by the same amount as the increase in the anticipated rate of inflation

(d) * rise, but by less than the anticipated increase in the rate of inflation









Source: McGraw Hill logo





Q2. The interest rate


(Select one answer)





(a) * is determined in the money market and has no influence on the goods market.

(b) * is determined in the goods market and has no influence on the money market.

(c) * is determined in the money market and influences the level of planned investment and thus the goods market.

(d) * is determined in the goods market and influences the level of planned investment and thus the money market.










Source: Pearson logo

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